The CEO of Iran Energy Exchange has announced plans to launch a carbon market. In an interview with IRNA, Ali Naqavi listed the bourse’s priorities for the current fiscal year (started March 20), including the introduction of new financial instruments, further development of electricity markets and launch of carbon market.
“The plan is being devised in collaboration with the Department of Environment,” he said, expressing hope for its swift implementation and positive outcomes.
No further details were provided by the official. Naqavi emphasized the establishment of the Green Power Board and its role in conducting transactions for renewable energy power plants.
“The market is expected to help increase investments in renewable energy and reduce electricity imbalances, as well as position Iran as the first country in West Asia to initiate renewable electricity transactions on the exchange,” he said.
He added that other projects in the electricity sector were currently being implemented in collaboration with the Energy Ministry.
IRENEX last month launched its “Green Power Board” where renewable power plants can sell their output.
The first renewable electricity transaction took place at a rate of 199,500 rials per kilowatt-hour and a volume of 670 kilowatt-hours, the IRENEX website reported.
By starting renewables trade in the capital market, policymakers seek to create a direct supply-demand market, expand use of renewables and establish a competitive environment for renewables.
The official emphasized the need of private sector involvement in renewable energy expansion, stating that it can only be achieved through the establishment of a market based on transparency and
efficiency, and by expanding decentralized government structures.
He also highlighted a change in the Energy Ministry 's approach over the last two years, resulting in cooperation between the ministry and IRENEX to propose "electricity exchange development" and the
relevant guidelines.
Naqavi considered trading electricity generated by renewable power plants as one of the important issues.
Based on earlier reports, eight power plants have been listed with the Green Power Board.
After getting the construction permits and other licenses, the Renewable Energy Organization (aka Satba) will sign 20-year contracts with renewable power plants. Later, the power plants will be introduced to IRENEX, get a trading code and offer their electricity on the energy exchange. If investors are unable to sell their electricity on the exchange for any reason, Satba will settle their
claims based on 70% of the discovered rate at the power plant.
IRENEX is a multi-commodity market for energy futures and commodities, including oil, gas, electricity,
petrochemicals and oil byproducts. It was launched in 2013 as the fourth exchange and operates under the auspices of the Securities and Exchange Organization.
Currently, 7,000 solar power stations of different sizes are operating in the country. Renewables,
including solar and wind, account for around 1% of the total electricity generation capacity of more than 90 GW.
Studies show renewable investments in Iran are profitable. The Energy Ministry says it wants to raise annual renewable energy output to 5,000 MW in four years in collaboration with private firms.
Private companies have invested $1 billion in expanding the key renewable sector, mainly solar and wind, but are expected to play a bigger and effective role.
